By Diana Carlen
State lawmakers have completed their seventh week of the regular session. Last week, they reached their second deadline where the focus was on the fiscal and transportation committees. Legislators on those committees worked long days and evenings to hear and pass out bills having a financial impact to the state. Feb. 24 was the fiscal committee cutoff. That means bills in their house of origin needed to pass out of their respective fiscal committees or they were considered “dead” for the legislative session, with some exceptions. These deadlines help state lawmakers and those involved in the legislative process focus their work and eliminate many bills from further consideration.
The Legislature will now focus on floor action, which entails the entire chamber (either the House of Representatives or the Senate) considering and voting on bills. Once a bill passes out of its original chamber, it moves to the other chamber, and the entire committee process repeats. Bills must be voted out of their original chamber by March 8 at 5 p.m. to remain alive this year.
Still No Relief on Exempt Fuel Surcharge
This week saw meetings with Ecology, the Governor’s office and key Democrat legislators to see if a solution could be found on the carbon fee surcharge that has been charged to farmers and the maritime industry who are supposed to be exempt. The Governor’s office continues to oppose a refund program as they disagree over whether fuel suppliers should be charging the surcharge, and they also argue the state has not received any money from the program yet.
The first Climate Commitment Act auction is scheduled to happen on Feb. 28. Results from the first auction will be announced the following week; we will then know what the price of an auction is and have a better sense of how much money the state will be collecting under the new program.
Discussions will continue on a potential path forward on this issue. It is still recommended that farmers maintain all fuel receipts.
Food Processor B&O Tax Incentives Pass Out of House Fiscal Committee
Legislation (HB 1573) extending three B&O tax preferences for dairy, fruit and vegetable, and seafood processing for products produced in Washington and exported out of the state for sale passed out of the House Appropriations Committee unanimously last week.
The bill has been referred to the House Rules Committee where it is awaiting a pull to the floor calendar so it can be eligible for a full vote by the House of Representatives.
EPR Legislation Voted out of House Appropriations Committee
The WRAP has cleared the fiscal committee deadline. Last Thursday, House Bill 1131 was amended and voted out of the House Appropriations Committee. The legislation requires producers of certain paper products and packaging to participate in and fund a producer responsibility organization, meet minimum postconsumer recycled content, outlines truth in labeling specifications, and creates producer responsibilities for beverage containers.
The sponsors of the bill have been resistant to outright exemptions, but have reluctantly agreed to a couple after having trouble getting the bill out of both the policy and fiscal committees. The substitute bill that moved out of the fiscal committee exempts FIFRA products and the packaging of drugs for animals, but not personal care and home cleaning products. Over-the-counter drug packaging is also not exempt under the bill. Notably, the substitute bill does not provide any exemptions for food packaging subject to regulation by the federal government.
HB 1131 will now proceed to the House Rules Committee. The Senate version of the bill has not been scheduled for any further action, and the House bill will likely be the vehicle for this session.
Road Usage Charge Proposal Heard
A hearing on a road usage charge proposal was held over the course of two days last week in the House Transportation Committee. House Bill 1832, sponsored by Rep. Jake Fey (D-Tacoma), establishes a voluntary road usage charge program (RUC) that imposes a per mile fee for the use of public roads. The program would begin on July 1, 2025. Under the proposal, the RUC would be set at 2.5 cent per mile. One year after registration for the program, the RUC would be paid at the time of vehicle registration renewal.
The bill also sets a target date for implementation of a comprehensive, mandatory RUC program for January 2030.
The proposal provides a reduction in the annual per-mile fee by a fee credit corresponding to motor vehicle fuel tax paid. Additionally, the electric and hybrid-electric vehicle registration renewal fees and the transportation electrification fees for vehicles participating in the voluntary RUC Program would be waived.
Opposition was voiced from a number of business stakeholders, including the Washington State Trucking Association and the Association of Washington Business, during the hearing, including concerns that the funds are not 18thamendment protected for highway use and, while the program may be voluntary at present, it may not stay that way. In addition, concerns were raised that the program would have a more detrimental impact on rural areas.
The bill was not brought up for a vote in the fiscal committee by last Friday’s deadline.
Hearing Held on Train Length
In unusually rapid action, House Bill 1839 was introduced, heard and voted out of the House Transportation Committee in less than a week. House bill 1839, sponsored by Rep. Sharon Tomiko Santos (D-Seattle) would prohibit common carriers from operating trains longer than 7,500 feet in the state, unless approved by the Utilities and Transportation Commission (UTC).
During the hearing, the bill’s sponsor highlighted the recent train derailment in East Palestine, Ohio, as the reason for introducing the bill. In addition, she noted the inconvenience caused when very long trains become stopped on tracks, especially in dense urban areas.
The hearing saw several stakeholders speak out against the legislation, including the Association of Washington Business, BNSF Railway, and the Northwest Seaport Alliance. BNSF specifically testified that the length of trains varies, especially if they are hauling single cargoes like grain, and that limiting train length inside the state would make it more expensive for shippers and exporters to use Washington’s ports and add more carbon pollution to the atmosphere.
Riparian Bill Fails to Move Out of Fiscal Committee
The bipartisan riparian legislation (House Bill 1720) supported by agricultural groups and many Tribes was not brought up for a vote in the House Appropriations Committee by Friday’s deadline, meaning it is dead this year.
The proposal, which saw support from agricultural stakeholders and a majority of Tribes, would have created a fully voluntary, regionally focused riparian grant program implemented by the State Conservation Commission. The bill was opposed by Gov. Inslee because it did not set minimum buffers and for not having state agencies as voting members on the task force.
While the proposal was slated to be voted on by the Committee on Feb. 22, the Capital Budget Committee chose not to take action on the bill ahead of Friday’s fiscal cut-off. Instead, during executive action, Committee Chair Rep. Steve Tharinger (D-Sequim) stated that the bill would not move forward, and the policy would be integrated into the (yet to be released) capital budget through a budget proviso. The budget proviso is likely to provide funding for a voluntary riparian grant funding, but it unclear at this time what the amount of that funding will be.
Notable Bills That Met Fiscal Deadline (Alive Bills):
- Reusable Packing Materials (HB 1422), sponsored by Rep. Larry Springer (D-Kirkland), clarifies that renting or leasing of packing material under a packing material sharing and reuse program is not subject to retail sales and use tax. The clarification provided by HB 1422 is necessary as a recent Washington Court of Appeals decision determined that reusable wooden pallets leased by food manufacturers constituted a “retail sale” and are subject to sales and use taxes.
- Commercial Energy Standards (SB 5057), sponsored by Sen. Mark Mullet (D-Issaquah), would delay the Tier 1 covered buildings reporting schedule under the State Energy Performance Standard and delay the Tier 2 covered buildings rulemaking and reporting requirements for state energy management and benchmarking by two years. The proposal would also create a work group to report on the impacts to state-owned buildings and public education buildings required to comply with the standard.
- Personnel Records (HB 1320), sponsored by Rep. Julia Reed (D-Seattle), requires an employer to provide an employee with a complete copy of their personnel file at no cost within 14 days of a request. Additionally, an employer would be required to provide a former employee with a signed, written statement with the effective date of discharge, whether the employer had a reason for the discharge, and if so, the reasons, within 14 days of the written request.
- Leasing of State Lands (SB 5254), sponsored by Sen. Kevin Van De Wege (D-Sequim), would require the Board of Natural Resources to approve any new or existing leases subject to renewal, except for agricultural, grazing or communication site leases or commercial leases with an annual value of less than $50,000. It would also require DNR to make all lease information for state public lands available to the public on a per parcel basis on an electronic platform.
Notable Bills That Failed to Make Fiscal Deadline (Dead Bills):
- Microenterprise Home Kitchens (HB 1706) would have directed the Board of Health to develop and begin a pilot program to allow for microenterprise home kitchen operations (MHKO). Beginning July 1, 2024, local health jurisdictions may permit up to 100 MHKOs in the first year and may permit up to 200 additional MHKOs in each year thereafter.
- Margin Tax (HB 1644) would have replaced the B&O tax with a Texas-like margin tax. This concept came out of the Tax Structure Work Group. The proposal drew widespread opposition from various businesses groups, labor and tribes. While this bill could be designated “necessary to implement the budget” and not subject to legislative deadlines, it is unlikely this proposal will move forward this year.
- Wage Replacement (SB 5109/HB 1095), sponsored by Sen. Rebecca Saldaña (D-Seattle) and Rep. Amy Walen (D-Kirkland), would have created a wage replacement program for workers who are unemployed and not eligible for the state and federal unemployment insurance. The bill raises several questions for employers regarding how workers may be rehired and how it may cooperate with federal regulations.